/  531 

03*1*- 


:^r7 


Americans  must  Control  their  own  Markets  and  their  own  Wages, 


SPEECH 

'  * 

or 

HON.  HENRY  L.  DAWES 


OF  MASSACHUSETTS, 

DELIVERED 


IN  THE  HOUSE  OF  REPRESENTATIVES, 


MAT  3,  1812. 


WASHINGTON: 

F.  &  J.  RIVES  &  GEO.  A.  BAILEY, 
REPORTERS  AND  PRINTERS  OF  THE  DEBATES  OF  CONGRESS*. 

1872. 


The  Tariff, 


The  House  having  under  consideration  the  bill 
(II.  R.  No.  2322)  to  reduce  duties  on  imports  and  to 
reduce  internal  taxes,  and  for  other  purposes— 

Mr.  DAWES  said : 

Mr.  Chairman:  I  must  in  the  outset  in 
voke  the  patience  of  the  Committee  of  the 
Whole,  for,  in  rising  to  close  an  exhaust¬ 
ing  and  an  exhausted  debate  upon  a  sub¬ 
ject  itself  intrinsically  dry  and  uninteresting 
I  find  that  I  have  been  unable,  in  the  prepara¬ 
tion  of  all  that  I  might  desire  to  say,  to  bring 
myself  within  even  the  compass  prescribed  by 
the  rule. 

Among  the  many  problems  which  con¬ 
fronted  this  Administration  on  coming  into 
power  demanding  a  solution  none  was  more 
formidable  than  that  in  which  the  finances  of 
the  nation  had  been  involved  by  the  war.  A 
national  debt  of  $2,700,000,000  had  been  suf¬ 
fered  to  hang  over  the  nation  for  nearly  four 
years  since  the  close  of  the  war,  with  only 
$13,655,668  of  principal  paid  during  all  that 
time.  An  annual  interest  account  of  $128,- 
502,102  24,  and  an  additional  current  expend¬ 
iture  averaging  during  that  time  $179,271,680, 
made  a  yearly  draft  upon  the  Treasury  of 
$307,773,782  24,  to  be  met  by  internal  taxes 
and  customs  duties.  Taxes  annually  collected 
off  the  industries  of  the  country  and  the  direct 
earnings  of  the  people  had,  during  those 
years  of  peace,  averaged  $162,194,491,29;  and 
the  customs  revenues  had,  during  the  same 
period,  reached  a  like  average  of  $193,691,- 
069  70.  Legal- tender  notes,  a  necessity  of 
the  war,  outliving  the  purpose  of  their  cre¬ 
ation,  had  supplanted  the  constitutional  cur¬ 
rency  of  the  nation,  inflating  prices,  swelling 
and  disturbing  the  currents  of  trade,  and  over 
turning  all  ordinary  modes  of  living  and  pur¬ 
suit.  The  medium  of  exchange  in  which  this 


great  people  were  left  to  transact  all  their  vast 
business  concerns  was  permitted  according  to 
the  standard  by  which  the  rest  of  the  world 
measured  values  to  sink  sometimes  as  low  as 
thirty- five  hundredths,  and  never  to  rise  higher 
higher  than  seventy-one  hundredths. 

There  had  been  no  attempt  to  grapple  with 
any  of  the  many  and  difficult  questions  this 
condition  of  things  involved.  The  nation  was 
without  a  policy  in  respect  to  the  public  debt. 
Whether  it  should  be  transmitted  to  posterity 
for  liquidation,  or,  like  the  British  debt,  be  suf¬ 
fered  to  fasten  itself  upon  the  future  of  the 
nation,  in  either  case  rolling  its  ever  recurring 
burden  of  interest  into  the  yearly  budget,  or 
whether  it  should  be  manfully  met  by  the  gen¬ 
eration  that  incurred  it  with  the  same  unflinch¬ 
ing  courage  through  which  it  came,  had  hardly 
been  debated.  Whether  the  evils  of  a  debased 
and  debasing  currency  were  to  become  perma¬ 
nent  or  pass  away  had  not  been  determined, 
nor  whether  extravagant  expenditures  and 
large  interest  accounts  should  continue  to  de¬ 
mand,  and  the  people  be  required  hereafter  to 
bear,  the  burdensome  exactions  of  internal 
taxes  and  exorbitant  rates  of  customs  duties 
which  the  war  had  required,  and  up  to  that 
time  the  nation  had  found  no  way  to  shake  off 
or  lighten. 

This  was  the  financial  problem  inherited 
by  this  Administration  only  three  years  ago. 
In  boldly  meeting  its  responsibilities  and 
working  out  its  solution  $300,000,000  of  the 
public  debt  has  been  extinguished,  on  May 
1,  $327,719,819  29;  and  nearly  as  much 
more  refunded  at  five  and  four  and  a  half  per 
cent,.,  saving  annually  between  two  and  three 
million  dollars  of  interest,  and  ultimately 
$20,000,000,  besides  making  possible  the  fund¬ 
ing  of  $1,000,000,000  more  at  a  still  lower  rate 


4 


and  larger  saving.  The  premium  upon  gold 
has  been  reduced  from  thirty-nine  to  ten, 
while  internal  taxes  have  been  reduced  from 
$310,906,984  17  to  $132,011,176  24,  and  cus¬ 
toms  duties  diminished  $30,000,000. 

While  applying  annually  from  the  current 
receipts  of  the  Government  $100,000,000  to 
the  extinguishment  of  the  public  debt,  econ¬ 
omy  in  expenditures  and  fidelity  in  collection 
have  enabled  the  Government  within  the  last 
two  years  to  relieve  the  business  pursuits  of 
the  nation  from  internal  taxes  to  the  amount 
annually  of  $55,000,000,  and  to  repeal  cus¬ 
toms  dutiesaraounting  each  year  to  $30,000,000, 
and  at  the  same  time  to  meet  every  demand  on 
the  Treasury  and  still  retain  an  abundant  bal¬ 
ance  for  any  unlooked  for  emergency.  But  so 
wise  had  been  the  policy  under  which  these 
immense  sums  had  been  annually  collected  to 
meet  the  unexampled  demands  consequent 
upon  the  war,  and  so  little  had  taxation,  prop¬ 
erly  adjusted,  crippled  energy  or  stifled  devel¬ 
opment,  that,  spite  of  reductions  in  taxes  and 
custom  duties,  amounting  in  the  aggregate  to 
$85,000,000,  the  Treasury  found  its  receipts 
in  the  very  next  year  greater  than  ever ;  and 
the  President  in  his  last  annual  message  called 
the  attention  of  Congress  to  this  gratifying 
condition  of  the  Treasury,  and  the  opportunity 
it  afforded  for  a  further  reduction  of  burdens 
without  impairing  the  credit  or  crippling  the 
business  of  the  country,  and  at  the  same  time 
maintaining  the  fixed  policy  of  his  administra¬ 
tion — that  of  the  ultimate  and  early  extinction 
of  the  public  debt.  He  says,  with  unques¬ 
tioned  wisdom  : 

“  I  recommend  that  all  taxes  from  internal  sources 
be  abolished,  except  those  collected  from  spiritu¬ 
ous,  vinous,  and  malt  liquors,  tobacco  in  its  various 
forms,  and  from  stamps. 

“  In  readjusting  the  tariff  I  suggest  that  a  careful 
estimate  be  made  of  the  amount  of  surplus  revenue 
collected  under  the  present  laws,  after  providing  for 
the  current  expenses  of  the  Government,  the  inter¬ 
est  account,  and  a  sinking  fund,  and  that  this  sur¬ 
plus  be  reduced  in  such  a  manner  as  to  afford  the 
greatest  relief  to  the  greatest  number.” 

The  Secretary  of  the  Treasury,  with  the 
data  at  his  command,  presents  in  his  last 
annual  report  the  same  considerations  more 
fully  and  elaborately,  pointing  to  the  fact  that, 
notwithstanding  the  great  repeal  of  taxes  and 
duties  by  the  last  Congress,  the  estimates  dis¬ 
close  a  surplus  of  receipts  over  expenditures, 
after  payment  of  the  interest  on  the  public 
debt,  of  $85,974,226  01,  from  which  the  sink¬ 
ing  fund  requires  $28,679,263,  leaving  undis¬ 
posed  of  $57,294,963.  He  said: 

“The  revenues  for  the  year  1871,  and  the  receipts 
since  the  1st  of  July  last,  show  that  the  time  has  ar¬ 
rived  when  a  considerable  further  reduction  in  taxes 
can  be  made,  and-  yet  leave  the  Government  in  a 


position  to  pay  at  least  $50,000,000  annually  of  the 
principal  of  the  public  debt,  including  the  amount 
pledged  through  the  sinking  fund.  In  my  annual 
report  to  Congress  for  1870,  I  expressed  the  opinion 
that  the  settled  policy  of  the  country  should  con¬ 
template  a  revenue  sufficient  to  meet  the  ordinary 
expenses  of  the  Government,  pay  the  interest  on  the 
public  debt,  and  from  twenty-five  to  fifty  million 
dollars  of  the  principal  annually.” 

And  recurring  to  the  subject  again,  he  says : 

“In  the  suggestions  I  have  the  honor  to  make  in 
reference  to  the  reduction  of  taxes,  I  keep  in  view 
two  important  facts:  first,  that  the  ability  of  the 
nation  to  pay  at  least  fifty  millions  annually  of  the 
principal  of  the  public  debt  shall  not  be  impaired; 
and,  secondly,  that  in  the  change  of  the  revenue 
system  no  violence  shall  be  done  to  the  business 
interests  of  the  country.  While  I  do  not  undertake 
to  state  precisely  the  causes  which  have  contributed 
to  the  public  prosperity,  there  is  no  substantial  rea¬ 
son  for  questioning  the  truth  of  the  statement  that 
the  last  few  years  have  been  the  most  prosperous  in 
the  history  of  the  country;  years  without  example 
in  our  own  affairs,  and  without  parallel  in  the  affairs 
of  any  other  Government. 

“It  is  practicable  to  dispense  with  all  revenue 
from  internal  sources  except  that  derived  from 
stamps,  spirits,  tobacco,  and  malt  liquors.” 

The  actual  receipts  thus  far  of  the  present  fis¬ 
cal  year,  now  more  than  nine  months  elapsed, 
being  $280,724,754  49,  show  that  the  cautious 
estimate  of  the  Secretary  of  the  Treasury  will 
fall  far  short  of  the  fact,  and  that,  at  existing 
rates  of  receipt,  if  there  be  no  change  in  the 
tax  or  tariff  laws,  there  will  be  more  than 
$100,000,000  instead  of  $86,000,000  in  the 
coming  year  beyond  current  expenses  at  the 
disposal  of  the  Treasury. 

The  CHAIRMAN.  The  gentleman  from 
Massachusetts  [Mr.  Dawes]  will  please  sus¬ 
pend  until  order  is  restored  in  the  Hall. 

Several  Members.  Will  the  Chair  state 
what  has  caused  this  commotion  in  the  House  ? 

The  CHAIRMAN.  The  information  is  that 
Horace  Greeley  has  been  nominated  at  Cin¬ 
cinnati.  [Laughter.] 

Mr.  HOAR.  Is  it  in  order  to  congratulate 
the  House  on  this  great  triumph  of  the  prin¬ 
ciples  of  protection? 

Mr.  RANDALL.  He  is  an  honest  man, 
anyhow. 

The  CHAIRMAN.  Gentlemen  will  please 
resume  their  seats  and  suspend  conversation.  * 
The  Chair  must  request  gentlemen  in  the 
rear  of  the  seats  to  desist  from  conversation, 
or  retire  to  the  cloak-rooms. 

Mr.  DAWES.  After  the  announcement  that 
has  been  made  I  do  not  know  that  there  is  any 
occasion  for  me  to  further  advocate  the  prin¬ 
ciple  of  protection  to  American  industry,  now 
that  he  who  more  than  any  other  living  man 
has  taught  that  doctrine  is  to  be  the  stand 


ard  bearer  of  those  who  have  hitherto  op¬ 
posed  it. 

For  the  first  nine  months  of  the  present 
fiscal  year  there  has  been  received  and 
covered  into  the  Treasury  up  to  this  time 
$280,724,754  49,  and  it  is  fair  to  estimate  the 
balance  yet  to  come  in  for  this  same  period  of 
nine  months  at  $5,000,000  more — 


Making . $285,724,754  49 

The  remainder  of  year  at  same  rate .  95,241,584  83 

Total  receipts .  380,966,339  32 

Expenditures  as  per  estimate .  273,025,773  99 

Surplus  in  Treasury .  107,940,565  33 


The  sinking  fund  requires. ..$28, 679, 263 
Proposed  payment  on  public 

debt .  25,000,000 

-  53,679,263  00 

Leaving  for  reduction  of  taxes  and 
duties . $54,261,302  33 


I  have  assumed  a  payment  of  $25,000,000  on 
the  principal  of  the  public  debt  beyond  the 
payment  into  the  sinking  fund  required  by 
law.  I  do  not  think  an  Administration  which 
has  signalized  its  first  three  years  by  an  annual 
payment  of  $100,000,000  of  the  public  debt 
and  received  the  unmistakable  commendation 
of  the  American  people  and  the  whole  finun 
cial  world  therefor,  can  afford  in  its  last  year 
to  voluntarily  put  it  beyond  its  power  to  pay 
at  least  $25,000,000  of  it. 

I  shall  assume,  therefore,  that  at  least  that 
sum  shall  be  provided  for.  There  will  then 
be  left,  taking  the  actual  receipts  of  the  last 
nine  months  as  the  basis,  $54,261,302  33  for 
a  reduction  in  the  revenue  by  a  repeal  of  in¬ 
ternal  taxes  and  customs  duties.  And  the 
question  arises  at  the  threshold  of  the  discus¬ 
sion,  how  shall  this  reduction  be  applied? 
By  the  action  of  Congress,  since  this  debate 
commenced,  the  duties  upon  tea  and  coffee 
have  been  repealed,  diminishing  the  revenue 
$15,893,846  67,  and  leaving  for  further  reduc¬ 
tion  $38,367,455  66.  If  all  internal  taxes 
except  those  upon  spirituous  and  fermented 
liquors  and  tobacco  should  be  repealed  it 
would  cause  a  further  reduction  of  about 
twenty-three  million  dollars,  and  would  leave 
$15,367,455  66  to  be  divided  between  an  en¬ 
larged  free  list  of  articles  which  enter  as  raw 
material  into  production  and  are  consumed, 
but  not  themselves  produced  in  this  country, 
and  a  general  reduction  of  duties  still  retained. 

It  is  to  the  reasons  for  such  an  application 
of  the  reductions  now  in  our  power  to  make, 
that  I  ask  the  attention  of  the  House  at  this 
time.  They  are  found  in  the  lessons  of  the 
past.  If  you  will  patiently  turn  with  me  to 
its  review  they  cannot  fail  to  be  recognized. 

The  courage  with  which  the  problem  of  finan¬ 
cial  complications  and  burdens  to  which  I 
have  already  called  attention  was  approached, 
and  the  persistency  with  which  the  strug¬ 
gle  has  been  maintained,  have  wrought  out 


the  solution.  The  credit  of  the  Republic  is 
established  among  the  nations  of  the  earth. 
Capitalists  at  home  and  abroad  are  eager  to 
take  our  bonds  at  a  reduced  rate  of  interest. 
Our  debt  is  being  paid  more  rapidly  than  any 
nation  before  us  or  beside  us  has  ever  met  its 
obligations,  and  the  interest  account  is  daily 
diminishing.  If  our  faith  falters  not  this  gen¬ 
eration  shall  not  pass  away  before  the  last 
trace  of  the  gigantic  burdens  of  the  war  shall 
have  faded  from  sight. 

The  key  to  this  solution,  the  grand  central 
idea  of  the  policy  which  has  wronght  out  this 
result,  has  been  the  maintenance  of  the  ma¬ 
terial  prosperity  of  the  nation.  That  collapse 
in  the  business  efforts  of  the  peeple,  that  par- 
alyzation  of  the  industries  of  the  land,  that 
fainting  after  years  of  unnatural  excitement, 
and  that  ebb  following  flood,  which  have  here¬ 
tofore,  and  with  all  other  peoples,  been  the 
certain  attendants  of  transition  from  the  un¬ 
natural  state  of  protracted  war  to  the  normal 
conditions  of  peace,  never  came  to  this  na¬ 
tion.  All  business  pursuits,  enterprises,  and 
investments,  prosperous  during  the  war  to  an 
unexampled  degree,  have  suffered  no  check 
either  in  growth,  development,  or  remuner¬ 
ative  return.  The  nation  has  laid  more  rail¬ 
roads,  tunneled  more  mountains,  and  spanned 
more  rivers  in  bringing  its  people  and  their 
pursuits  and  products  to  each  other’s  door 
than  ever  before.  Labor  has  been  better  paid, 
has  better  understood  itself  and  its  relations 
to  capital  than  ever  before,  and  has  achieved 
an  independence  in  position,  in  home  and  its 
comforts,  in  physical  and  mental  life  never 
before  attained. 

Ten  years  ago  the  yearly  immigration  to  this 
country  in  search  of  a  better  home  was  only 
69,449.  In  1860  it  amounted  to  129,715.  Now 
it  exceeds  321,350,  and  the  demand  for  labor¬ 
ers  exceeds  the  supply.  In  1860  the  census 
returned  the  true  value  of  real  and  personal 
property  in  this  Union  exclusive  of  slaves  to 
be  $18,000,000,OT)0 ;  that  of  1870  returns  that 
true  value  to  be  $30,000,000,000.  Making 
all  allowances  for  inaccuracies  and  for  cur¬ 
rency  inflation,  still  it  is  a  greater  increase  in 
ten  years,  by  more  than  thirty  per  cent.,  than 
all  the  increase  of  all  the  previous  years  of 
the  history  of  the  nation. 

Had  the  nation  forgotten,  in  the  levying  of 
taxes  and  imposing  burdens  to  meet  the  exi¬ 
gencies  of  war,  that  internal  strength  was  the 
source  of  power,  or,  following  false  theories, 
had  lost  sight  of  home  production  in  search 
of  something  cheaper,  exhaustion  in  the  midst 
of  the  struggle  or  prostration  and  paralyzation 
at  its  close  would  have  been  inevitable.  In¬ 
stead,  during  the  years  of  the  war  itself,  out¬ 
side  the  lines  of  military  operations  and  all 
over  the  Union  since  the  surrender,  the  mate¬ 
rial  prosperity  of  the  nation,  growth  in  wealth, 

,i  and  the  development  of  its  internal  strength. 


6 


have  been  unexampled  whether  compared  with 
any  past  period  of  its  own  history  or  with  that 
of  any  other  nation. 

I  have  indulged  in  this  rapid  review  of  the 
past  that  I  might  inquire,  in  determining  the 
mode  of  reducing  the  revenues  $50,000,000, 
what  is  this  lesson  of  the  past  ?  Shall  we  in 
this  reduction  adhere  to  the  principles  of 
the  existing  system  under  which  results  so 
amazing  have  been  wrought  out,  or,  departing 
from  the  past  policy  of  the  nation,  adopt  new 
theories  and  follow  new  lights  be  they  ever  so 
plausible  or  dazzling  ?  Shall  we  abandon  ex¬ 
perience  for  experiment  ?  For  my  own  part 
I  may  not  understand  the  theories  of  Bastiat, 
or  be  able  to  fathom  the  philosophy  of  John 
Stuart  Mill.  The  aphorisms  of  Perry  and  the 
figures  of  Atkinson  may  confound  me.  I  can¬ 
not  stop  now  to  settle  that  question.  But  this  I 
do  know  :  the  country  has  all  this  time  grown 
stronger  and  richer  and  greater  under  the  ex¬ 
isting  system.  Her  people,  to  the  humblest 
operative  in  her  mills,  miner  among  her  ores, 
or  smith  at  her  forges,  have  all  the  time  been 
lifting  themselves  to  a  higher  plane  ofmaterial, 
mental,  and  moral  life. 

We  are  told  by  the  philosophers  of  the  new 
dispensation  that  to  put  the  laborer  of  this 
country  upon  a  perfect  equality  with  the  laborer 
in  other  countries,  who  works  for  less  and  lives 
on  less,  by  the  imposition  of  duties  upon  his 
products  sent  into  our  markets,  is  to  put  a  tax 
upon  our  own  consumers.  It  may  be  so  ;  but 
it  is  not  by  taxation  that  a  nation  thus  grows 
rich  and  strong  and  great,  in  and  through  the 
elevation  and  improvement  in  all  the  condi¬ 
tions  of  the  life  of  the  laboring  masses,  which 
make  up  her  character  and  power  and  rule  her 
destinies.  It  may  be  that  arithmetic  in  the 
hands  of  a  professor  can  figure  out  the  exact 
tax  which  under  the  existing  system  the  weaver 
at  the  loom  or  the  hatter  in  his  shop  pays  on 
the  coat  he  wears,  the  shoes  he  buys,  or  the 
hat  he  makes ;  but  the  intelligent  workman 
will  all  the  while  with  exultant  pride  point  to 
the  comforts  of  his  cottage,  to  the  school- 
house,  and  to  the  savings  bank,  for  which  he 
exchanged  a  hovel  and  a  pittance  in  a  foreign 
land,  and  will  laugh  figures  and  theories  out 
of  his  sight  while  he  stiil  beckons  those  left 
behind  living  on  philosophy  to  turn  their  faces 
from  preachers  to  practical  results. 

I  am  constrained  by  such  considerations  as 
these  in  reducing  the  revenue  to  adhere  to  the 
policy  of  the  past.  I  seek  to  recognize  in  legis¬ 
lation,  which  from  its  nature  affects  industry, 
the  difference  in  the  conditions  under  which 
that  industry  must  exist.  If  disadvantages 
lie  at  the  door  of  labor  in  this  land  when 
competing  with  the  labor  of  another  country, 
it  is  the  part  of  neither  wisdom  nor  patriotism 
to  ignore  or  omit  to  remove  them.  If  com¬ 
merce  between  this  and  other  nations  is  to  be 
established  in  disregard  of  all  inequalities  and 


all  advantages  possessed  by  them  or  possible 
of  attainment  by  us,  it  is  sure  to  impoverish 
and  exhaust  us. 

In  the  reduction  of  existing  duties  just  as 
much  as  in  the  imposition  of  new  ones  the 
legislation  adopted  necessarily  and  inevitably 
affects  production  so  far  as  the  duty  touches  a 
possible  home  manufacture.  And  the  plain 
practical  question  is,  shall  that  effect  be  inju¬ 
rious  or  advantageous?  In  the  readjustment 
to  which  we  are  addressing  ourselves  duties 
are  to  be  imposed  in  one  of  two  ways  only — 
indifferently  or  with  discrimination.  Indiffer¬ 
ence  is  blind  folly,  and  discrimination  alone  is 
worthy  of  intelligent  legislators.  The  answer, 
therefore,  to  a  single  question  would  seem  to 
make  the  path  of  duty  plain,  and  settle  for¬ 
ever  all  controversy,  shall  that  discrimination 
be  in  favor  or  against  the  Americau  product? 
The  question  is  put  to  American  legislators. 
You  cannot  escape  discrimination,  a  choice 
between  two ;  the  one  is  the  home  product, 
the  other  is  the  foreign.  As  between  these 
two,  will  you  discriminate  in  favor  or  against 
the  products  of  your  own  country? 

Remember,  that  where  the  product  origin¬ 
ates,  there  also,  is  the  producer;  that  where 
is  the  manufacture,  there  too  are  the  hands 
that  fashion  it ;  there  too  is  the  capital  ne¬ 
cessary  for  production ;  there  too  are  built 
the  homes  of  the  artisans,  are  supplied  their 
tables  with  daily  food,  their  houses  with  daily 
comforts,  their  children  with  schools,  their 
towns  with  the  artificers  of  all  that  the  varied 
and  diversified  wants  of  civilized  life  con¬ 
stantly  demand.  This  makes  a  town,  and 
towns  make  a  State.  Where  shall  this  town 
rise,  on  this  or  the  other  side,  on  our  own  soil 
or  in  a  foreign  land?  You  may  have  this  town 
where  you  will — by  the  side  of  Lowell,  at 
Manchester  on  the  James,  by  St.  Anthony’s 
falls,  or  Moline  on  the  Mississippi.  It  may 
be  planted  by  some  waterfall  in  the  now 
wilderness  of  the  far  West.  You  can  choose 
its  location,  or  let  it  be  built  on  the  other  side 
of  the  water,  and  all  its  advantages  and  wealth 
of  material  and  men  be  lost  to  us  forever.  It 
is  for  you  to  determine.  Take  two  mills,  the 
one  in  Manchester  or  Glasgow,  the  other  in 
Paterson  or  Lawrence.  Now,  the  necessities 
of  the  Government  require  the  imposition  of  a 
given  duty,  and  that  must  be  imposed  either 
upon  the  raw  material  imported  to  supply  the 
one  at  Patterson,  or  the  manufactured  article 
produced  by  the  one  at  Manchester.  That 
discrimination,  which  no  legislator  can  avoid, 
will  compel  us  to  determine  between  the  two, 
and  he  who  can  hesitate  when  the  choice 
between  our  own  and  foreign  producers  is 
open  to  him  is  sick  of  an  incurable  disease. 

Now,  sir,  let  the  ultimate  adjustment  of  these 
necessary  duties  be  equalization.  Let  no  more 
duties  be  imposed  than  the  exigencies  of  the 
Government  demand,  but  let  those  duties  be 


7 


so  adjusted  between  manufactured  articles  and 
raw  material  as  to  equalize  the  conditions  of 
production  in  our  own  country  with  those  of 
foreign  nations,  and  the  highest  possible  good, 
the  true  end  of  legislation,  is  attained.  Thus 
will  the  necessities  of  the  Government  be  met 
and  no  more,  and  at  the  same  time  the  material 
prosperity  of  the  nation  assured. 

What  those  inequalities  between  production 
here  and  in  other  nations  are  requires  careful 
study.  They  vary  greatly  in  different  pursuits, 
and  perfect  equalization  is  most  difficult  of 
attainment.  Such  as  can  be  remedied  consist 
generally  in  the  difference  of  cost  in  the  raw 
material  to  which  labor  is  applied,  difference 
in, the  wages  paid  for  that  labor,  difference  in 
the  cost  of  the  capital  necessary  to  carry  on 
the  business,  and  in  the  local  expenses  and 
taxes  that  the  producer  encounters  in  the  pro¬ 
gress  of  his  work.  These  can  be  approximately 
ascertained. 

The  difference  in  the  rate  of  interest  on 
business  capital  between  Great  Britain  and 
the  United  States  is  the  difference  between  four 
per  cent,  and  seven  per  cent.  National  secur¬ 
ities  are  in  the  one  case  three  per  cent.,  in  the 
other  six;  so  it  results  that  every  dollar  in¬ 
vested  in  production  here  costs  nearly  as  much 
as  two  there. 

The  wages  of  labor  are  more  difficult  of 
ascertainment.  They  vary  in  different  employ¬ 
ments,  at  different  times,  and  in  different  coun¬ 
tries.  They  are  on  a  general  rise  throughout 
Europe  at  the  present  time,  attributable  more 
than  anything  else  to  the  superior  inducements 
in  compensation,  in  comforts  of  life,  in  oppor¬ 
tunities  and  possibilities  which  are  constantly 
tempting  to  this  country  by  the  hundreds  of 
thousands  annually  the  laborers  of  other 
nations,  depleting  their  workshops  and  supply¬ 
ing  ours. 

The  census  returns  are  full  of  instruction 
on  this  point.  The  number  of  skilled  arti¬ 
sans  who  in  the  last  ten  years  have  turned 
their  faces  from  foreign  workshops  in  search 
of  employment  among  the  skilled  industries 
of  this  country  is  more  than  treble,  nearly 
quadruple  the  number  in  the  preceding 
decade.  Thirty-two  thousand  skilled  work¬ 
men  reached  our  shores  last  year;  and  in  a 
constantly  increasing  aggregate  of  immigra¬ 
tion  there  has  been  an  actual  falling  off  from 
Ireland  and  non-manufacturing  States,  and  a 
corresponding  increase  from  those  nations 
more  devoted  to  the  production  of  fabrics  for 
the  markets  of  the  world. 

I  take  an  extract  from  a  book  published  in 
London  in  1870,  called  Social  Politics  in 
Great  Britain  and  Ireland,”  found  among 
the  many  interesting  facts  collected  by  my  dis¬ 
tinguished  colleague  on  the  committee,  [Mr. 
Kelley,]  in  the  book  published  by  him.  This 
extract  illustrates  both  the  strong  current  of 
immigration  to  this  country  and  its  causes, 


and  at  the  same  time  the  character  of  those 
who  are  of  late  years  turning  to  better  their 
fortunes  here.  It  is  as  follows : 

“There  are  now  above  seventy  thousand  souls  in 
the  east  end  of  London  who  must  emigrate  speedily 
or  die.  They  are  being  shipped  off  as  fast  as  charity 
and  Government  can  transport  them  to  North  Amer¬ 
ica.  Above  twenty-five  thousand  of  these  are  work¬ 
men  more  or  less  skilled  in  engineer  and  ship-build  ¬ 
ing  occupations.  These  are  not  shepherds,  nor  are 
they  plowmen,  nor  will  they  ever  be  to  any  great 
extent  one  or  the  other.  They  are  mechanics,  and 
will  be  so  go  where  they  may.  In  the  vast  hives  of 
industry  in  Lancashire  there  are  a  greater  number 
who  must  emigrate  or  die.  These  are  getting  off  as 
fast  as  they  possibly  can  to  Massachusetts  to  find  full 
occupation  in  cotton.  Not  one  is  either  pastoral  or 
agricultural,  and  few  are  likely  ever  to  be  either.” 

This  was  as  late  as  1870. 

Mr.  Commissioner  W ells  compares  the  wages 
paid  in  the  United  States  in  1867  in  sixteen 
different  occupations  with  those  paid  in  Great 
Britain  of  like  occupations  during  1866,  show¬ 
ing  an  average  increase  in  them  all  of  more  than 
fifty-five  per  cent.  The  Bureau  of  Statistics 
in  1870  furnishes  a  later  and  still  more  striking- 
table  of  comparisons  between  the  wages  paid 
in  the  United  States,  Great  Britain,  Prussia, 
Saxony,  Switzerland,  and  Belgium,  in  fifty-one 
different  employments ;  and  I  have  here  the 
actual  pay-roll,  for  two  weeks,  of  two  different 
manufacturing  establishments  engaged  in  pre¬ 
cisely  the  same  kind  of  business — the  manufac¬ 
ture  of  spool-thread,  and  of  equal  production — 
both  owned  by  the  same  parties,  but  one  is  situ¬ 
ated  in  Scotland  and  the  other  in  New  Jersey. 
This  pay-roll  was  made  out  within  six  weeks 
of  the  present  time,  and  is  in  the  handwriting 
of  one  of  the  owners  themselves.  It  is  an  in¬ 
dustry  in  which  seventy-five  per  cent,  of  all 
the  cost  is  labor,  and  on  which  it  is  proposed 
by  the  present  bill  to  reduce  the  duty  twenty 
per  cent.  I  will  read  this  pay-roll,  showing 
prices  paid  in  Newark,  New  Jersey,  com¬ 
pared  with  those  paid  in  Scotland: 


Wages  paid  at 

Wages  paid 

Neioark,  Nero 

in  Scotland 

Jersey,  for  two 

for  two 

xoeeks. 

weeks. 

Foreman  cope-winders 

.  $28  00 

$11  00 

Cope-winders,  (women) 

.  16  00 

5  50 

Foreman  on  twisters . 

.  40  00 

15  00 

Overseers . 

.  28  00 

9  00 

Twisters,  (girls) . 

.  13  00 

4  00 

Rulers,  (girls) . 

.  16  00 

5  50 

Hand  spoolers,  (girls)... 

.  16  00 

5  50 

Machine  spoolers . 

.  16  00 

5  50 

Ticketers  . . 

.  16  00 

5  50 

Dyers . 

.  30  00 

13  00 

Bleachers,  (men) . 

.  28  00 

5  50* 

Spool-turners . ,... 

.  36  00 

14  00 

Machinists . 

.  35  00 

14  00 

Carpenters . 

.  40  00 

14  00 

Total . 

. $358  00 

$127  00 

*  Women. 

8 


It  will  be  seen  that  this  total  shows  a  differ¬ 
ence  of  three  to  one.  To  all  this  difference 
is  to  be  added  the  difference  in  local  expenses 
and  taxation.  The  effects  of  the  depreciated 
character  of  our  currency  are  felt  in  every 
branch  of  industry  and  in  every  department 
of  expenditure.  The  cost  of  living,  cost  of 
clothing,  cost  of  every  necessary  and  of  every 
luxury  is  increased  by  it.  Even  the  articles 
which  we  import,  measured  by  the  standard 
of  gold  on  the  other  side,  brought  here  cost 
us  just  as  much  more  as  the  paper  in  which 
we  pay  for  them  falls  below  the  universal 
standard  of  values.  Local  taxation  incident 
upon  the  expenses  of  the  war  aud  from  other 
causes  in  this  country  far  exceeds  taxation 
in  any  other.  It  amounted  the  last  year  to 
$281,180,312,  or  $7  29  to  every  man,  woman, 
and  child  in  the  United  States. 

All  these  differences  in  the  cost  of  pro¬ 
duction  the  manufacturer  on  this  side  of  the 
Water  encounters  ;  and  it  is  the  blindest  folly 
to  open  our  markets  to  producers  thus  un¬ 
equally  matched.  The  consequences  certain  to 
follow  are  as  apparent  as  the  plainest  laws  of 
trade.  The  production  must  be  reduced  in 
cost  here  or  the  market  abandoned  to  the 
cheaper  producer  of  foreign  fabrics.  A  reduc¬ 
tion  of  wages  is  inevitable  in  every  attempt  to 
reduce  the  cost  of  production  here  to  the 
standard  abroad,  and  the  plain  proposition 
presents  itself:  will  you  thus  open  our  mar¬ 
ket  to  the  foreign  producer  and  reduce  the 
compensation  of  the  laborer  at  home? 

Where  it  is  possible  of  attainment,  is  any 
duty  plainer  than  that  legislation  shall  be  so 
shaped  that  whatever  of  labor  is  to  be  per¬ 
formed  for  this  country  shall  be  performed  by 
the  laborers  of  the  country?  Are  we  to  enter 
upon  a  new  policy,  the  first  and  inevitable  re¬ 
sult  of  which  will  be  the  alternative  of  depend¬ 
ence  upon  foreign  countries  for  production, 
or  a  reduction  to  their  level  of  compensa¬ 
tion  for  the  labor  bestowed  upon  production 
here?  Shall  we  close  our  mills  and  shops  and 
forges,  and  turn  adrift  the  thousands  there 
employed,  and  become  a  nation  of  consumers 
of  other  nations’  products;  or  shall  we  put  the 
thousand  busy  fingers  of  industry  here  upon 
the  same  footing,  in  compensation,  in  fare,  in 
home  comforts,  and  future  prospects,  with 
those  that  crowd  every  avenue  to  toil  in  the 
Old  World,  and  clutch  at  the  pittance  there 
doled  out  to  them? 

There  is  no  escape  from  one  or  the  other  of 
these  consequences,  either  of  which  would  be 
humiliation  and  poverty.  Equalization  is  in¬ 
evitable.  A  free,  unobstructed  commerce  be¬ 
tween  nations  devoted  to  commercial  pursuits 
will  ultimately  as  surely  bring  all  conditions  of 
competition  to  a  common  level  as  will  a  cur¬ 
rent  established  between  two  bodies  of  water 
bring  both  to  one  and  the  same  common 
point.  The  lowest  will  not  more  surely  drain 


the  highest  in  the  one  case  than  in  the  other. 
Remove  all  obstacles  in  Niagara  river  and  Lake 
Erie  will  empty  itself  into  Ontario.  The  only 
condition  of  continued  commerce  between  the 
two  is  to  lock  up  or  lock  down  the  great  nat¬ 
ural  inequality  between  them  so  long  as  it 
shall  remain. 

I  have  already  shown  that  the  superiority  in 
all  the  recompenses  of  labor  in  this  country 
is  emptying  the  workshops  of  England,  Bel¬ 
gium,  and  Germany  of  their  most  skilled 
workmen. 

What  has  been  the  effect?  To  stop  this  exo¬ 
dus  greater  compensation,  higher  rewards,  and 
stronger  inducements  to  remain  at  home  are 
being  held  out  by  employers  there  every  day. 
Knowledge  of  the  better  treatment  and  greater 
opportunities  as  well  as  greater  power  of  wage 
labor  in  this  country  is  breeding  discontent  in 
the  breast  of  its  kin  abroad. .  All  this  forces 
an  increase  of  wages  abroad,  and  consequently 
increases  the  cost  of  production  there.  Thus 
equalization  is  attained  by  locking  up  instead 
of  locking  down.  The  influence  of  that  ad¬ 
herence  to  our  own  system  which  is  securing 
to  the  laborers  of  this  country  the  labor  of  the 
country,  is  being  felt  in  the  amelioration  of  the 
condition  of  labor  in  all  nations  which  are  to¬ 
day  seeking  to  compete  with  us  in  our  own 
markets.  It  is  that  law  of  equalization  which 
forces  itself  upon  all  commerce.  And  it  is 
our  persistency  that  gives  us  a  victory  which 
would  otherwise  be  theirs. 

I  turn  now  briefly  from  the  consideration  of 
these  results  upon  production  and  the  pro¬ 
ducer  to  an  examination  of  the  effect  upon 
the  consumer.  We  are  told  that  such  a  duty 
upon  articles  which  can  be  manufactured  in 
this  country  as  shall  equalize  the  conditions 
of  their  production  here  with  those  of  the 
countries  from  which  they  come  to  compete 
in  our  markets  is  so  much  a  tax  upon  the 
consumer.  This  is  borne  out  neither  by  rea¬ 
son  nor  experience.  The  question  with  the 
statesman  and  legislator  is  not  whether  in  a 
given  instance  and  at  any  particular  time  that 
duty  is  not  found  added  to  cost,  but  whether 
the  tendency  of  such  legislation  and  the  laws 
which  govern  supply  and  demand  work  out 
such  a  result  as  the  ultimate  effect  of  the 
imposition  of  the  equalizing  duty. 

1  suppose  it  will  not  be  denied  that  compe¬ 
tition  controls  prices  in  every  market.  It  is 
likewise  true  that  equality  is  essential  to  com¬ 
petition.  It  cannot  long  live  on  any  other 
terras.  If  the  home  producer  is  not  put  on  an 
equal  footing  with  the  foreign  producer  he 
cannot  compete  with  him,  aud  is  ultimately 
sure  to  be  driven  from  the  market.  If  the 
home  producer  drives  his  foreign  competitor 
from  the  market,  as  he  surely  will  if  the  com¬ 
pensatory  duty  rises  above  equalization  and 
becomes  what  is  denominated  protective,  then 
he  invites  home  competition,  and  is  held  at 


9 


once  to  the  line  of  a  fair  remunerative  profit. 
For  in  this  land  where  freedom  of  pursuit  is 
open  to  every  one,  and  capital  and  labor  are 
eager  for  employment,  no  calling  can  yield 
more  than  a  fair  remunerative  return  without 
instantly  tempting  into  its  paths  a  crowding 
competition  that  will  inevitably  by  over-supply 
reduce  the  cost  to  the  consumer.  It  can  never 
be  otherwise  so  long  as  the  universal  man  is  a 
searcher  for  gain. 

It  is  charged  against  this  policy  that  its  pur¬ 
pose  is  to  stimulate  home  production.  I  do 
not  know  how  that  can  be  done  without  at  the 
same  time  stimulating  home  competition.  And 
the  law  of  competition  is  the  reduction  of  cost 
to  the  consumer. 

The  unbroken  testimony  of  experience  cor¬ 
roborates  this  statement.  There  is  no  staple 
article  of  home  manufacture  which  has  estab¬ 
lished  itself  on  a  sure  foundation  under  that 
care  of  its  own  Government  which  secures  for 
it  fair  play  and  equality  of  competition  in  our 
own  market,  which  has  not  steadily  diminished 
in  cost  to  the  consumer.  I  do  not  mean  to  say 
that  that  tendency  to  reduction  has  been  always 
strong  enough  to  counteract  the  opposite  effect 
of  outside  and  independent  causes.  Thus  the 
inflation  of  the  currency  has  been  too  power¬ 
ful  to  be  counteracted  by  the  laws  of  competi¬ 
tion,  the  fruits  of  invention  stimulated  by  the 
opportunity  thislegislation  secures,  and  the  con¬ 
fidence  in  long  reaches  which  stability  inspires. 
So,  too,  local  taxes  and  outlays,  unusual  casu¬ 
alties  and  disturbances  in  the  currents  of  trade 
may  temporarily  work  a  like  result.  But  in 
the  long  run  a  permanent  policy,  securing  the 
home  market,  concentrates  energy  and  enter¬ 
prise,  invites  capital,  multiplies  production 
through  invention,  tempts  competition  till 
prices  reach  the  lowest  possible  level  of  re¬ 
munerative  production.  No  better  illustration 
of  this  law  can  be  found  than  in  the  manufac¬ 
ture  of  nails,  an  article  of  prime  necessity  and 
of  universal  consumption.  Atthe  beginning  of 
this  century  they  cost  about  twenty-five  cents  a 
pound,  and  were  wrought  out,  each  single  nail, 
by  hand  at  a  forge.  The  contrast  in  the  condi¬ 
tion  of  the  manufacture  then,  and  as  we  see  it 
now,  is  best  told  in  an  extract  from  a  speech  of 
Fisher  Ames  in  the  discussions  of  the  first  tariff 
bill  in  1789 — only  two  days  after  the  organiza¬ 
tion  of  the  Government.  He  said  he — 

“  Thought  this  a  useful  and  accommodating  man¬ 
ufacture,  which  yielded  a  clear  gain  of  all  it  sold  for 
except  the  cost  of  the  material.  The  labor  employed 
in  it  was  such  as,  if  not  thus  employed,  would  in 
many  instances  be  thrown  away.  It  had  become 
usual  for  the  country  people  to  erect  small  forges  in 
their  chimney-corners,  and  in  the  winter  evenings, 
when  little  other  work  could  be  done,  great  quanti¬ 
ties  of  nails  were  made  even  by  children.  These  peo¬ 
ple  took  the  rod  iron  of  the  merchant  and  returned 
him  nails,  and  in  consequence  of  this  easy  mode  of 
barter  the  manufacture  was  prodigiously  great.” 
Under  the  policy  then  adopted,  which  secured 


to  the  laborer  of  this  country  the  right  to  per¬ 
form  this  kind  of  labor  for  the  country,  this 
manufacture  has  gone  on  in  improvement  and 
consequent  yearly  reduction  in  price,  till  now, 
by  the  most  wonderful  automatic  machinery, 
iron  is  transformed  into  nails  by  thousands  of 
instruments  more  rapidly  at  each  than  one  can 
count,  and  at  a  cost  of  scarce  a  fraction  beyond 
that  of  the  iron  itself.  And  now  nails  flow 
into  use  in  every  department  of  industry.  The 
inventions  through  which  this  marvel  is  at¬ 
tained  are  just  as  much  the  result  of  the  stim¬ 
ulant  the  home  market  created  as  any  other, 
and  born  of  them  is  the  wonderful  mechan¬ 
ism  which  carries  this  manufacture  one  step 
further  and  produces  the  wood-screw  in  all  its 
varieties  of  form  and  size. 

In  all  this  no  account  is  taken  of  the  effect 
of  home  production  for  a  home  market  upon 
the  ability  of  a  nation  to  consume  those  pro¬ 
ducts.  Home  production  and  consumption 
combined  are  the  tests  of  national  wealth,  and 
the  reflex  influence  of  each  upon  the  other  is  a 
fixed  law  of  national  growth.  The  more  a 
nation  produces  for  its  own  markets  the  more 
it  will  be  able  to  consume.  It  is  otherwise  if 
it  produces  only  for  foreign  markets  and  strives 
for  that  end  to  cheapen  the  cost  of  production 
till  labor  is  starved  and  pinched  and  impover¬ 
ished,  thereby  disabling  consumption,  as  in  the 
case  of  England  to-day.  Turn  from  that  pic¬ 
ture  to  the  amazing  exhibition  of  the  statistics 
of  increase  of  production  in  this  country,  which 
my  colleague  on  the  committee  from  New 
York  [Mr.  E.  H.  Roberts]  read  to  the  House 
from  the  census  a  day  or  two  since.  That  in¬ 
crease  on  manufactures  alone  was,  in  1870, 
$4,302,452,616 against  $1,685, 861, 676 in  1860; 
an  increase  of  one  hundred  and  twenty -eight 
per  cent. 

Whose  heart  did  not  swell  with  exultant 
pride  at  this  proof  of  the  development  and 
growth  of  this  country  ?  Let  my  other  colleague 
upon  the  committee,  from  New  York  city, 
[Mr.  James  Brooks,]  no  longer  sigh  that  he 
did  not  see  boxes  of  American  shoes  or  shovels 
floating  down  some  hard-named  river  in  Japan 
or  China,  never  heard  of  before,  when  he  can 
regale  his  sight  with  the  crowded  marts  and 
thoroughfares  and  storehouses  of  our  own  land, 
to  its  remotest  limits,  bursting  with  the  very 
fatness  of  increased  home  production. 

Mr.  Chairman,  if  I  have  dwelt  too  long  upon 
these  reasons  for  adherence  to  the  policy  which 
has  produced  these  results,  and  paid  too  little 
attention  to  the  arguments  of  my  distinguished 
colleagues  upon  the  committee  who  urge  an 
abandonment  of  that  policy,  and  with  it  our 
own  markets  to  foreign  producers,  it  has  not 
been  that  I  have  failed  to  appreciate  their  abil¬ 
ity  or  to  acknowledge  their  sincerity.  Although 
I  have  been  a  faithful  student  both  in  the  com¬ 
mittee-room  and  on  this  floor  of  all  they  have 
uttered,  I  confess  that  they  bewilder  me. 
They  beckon  me  different  and  opposite  ways 


10 


at  the  same  time.  No  man  ever  yet  attempted 
with  success  to  travel  in  opposite  directions  at 
the  same  time,  but  when  a  third  turns  up 
before  his  bewildered  eyes  ordinary  capacity 
fails. 

The  gentleman  from  Indiana,  [Mr.  Kerr,] 
from  Illinois,  [Mr.  Burchard,]  and  from  Mis¬ 
souri,  [Mr.  Finkelnburg,]  all  members  of 
the  committee,  have  at  different  times  hereto¬ 
fore  and  during  this  debate  attacked  the  ex¬ 
isting  system  of  tariff  duties.  The  gentleman 
from  Indiana  [Mr.  Kerr]  declares  their  pur¬ 
pose  and  effect  to  be  the  establishment  of 
“monopolies,”  “odious,  hateful  monopolies,” 
with  exclusive  privileges  secured  to  them  by 
law  from  which  others  were  shut  out.  In  a 
speech  delivered  here  not  long  since  under  the 
the  hour  rule,  he  pronounced  them  “  monop¬ 
olies  ”  twenty-one  times  by  actual  count. 
Sometimes  they  were  “hateful,”  “bloated,” 
“  corrupt,”  butalways  “  monopolies,”  against 
which  he  raised  his  “  solemn  voice,”  besides 
entering  his  “solemn  protest.”  Yesterday 
they  were  “  plunderers  and  robbers.” 

The  gentleman  from  Illinois,  [Mr.  Burch¬ 
ard,]  on  the  contrary,  says  that  the  aim  of 
the  system  is  just  the  opposite  ;  that  it  seeks 
to  divert  capital  into  these  pursuits  from 
others,  and  forces  labor  from  other  employ¬ 
ments  into  these,  and  even  offers  bounties  to 
both  capital  and  men  to  leave  other  pursuits 
and  engage  in  these.  Three  hundred  thousand 
men,  he  says,  are  under  it  pensioned  more 
than  all  the  pensioners  of  the  war,  by  bounties 
and  high  wages,  to  induce  them  to  leave  other 
employments  for  these.  Then  comes  the  gen¬ 
tleman  from  Missouri,  [Mr.  Finkelnburg,] 
right  in  between  these  gentlemen,  and  in  a 
speech  lately  delivered  on  the  “  relations  of 
tariffs  to  wages”  he  insists  that  these  men 


who  go  into  what  they  call  the  protected  em¬ 
ployments  not  only  do  not  get  any  bounty,  but 
do  not  get  even  decent  wages.  He  says  that 
they  are  ground  down  in  abject  poverty,  and 
are  growing  poorer  and  ragged  every  day. 
And  he  read  reports  from  my  own  State  to 
show  the  misery  and  distress  of  the  very  oper¬ 
atives  who  in  the  eyes  of  the  gentleman  from 
Illinois  [Mr.  Burchard]  were  bounty-paid 
pensioners,  till,  as  the  gentleman  informed 
us,  his  heart  was  “  sick.” 

Now,  I  might  well  leave  these  three  col¬ 
leagues  on  the  committee  pointing  their  guns 
at  each  other  and  abide  patiently  the  result — 
for  no  triangular  duel  between  skillful  and 
trained  marksmen  like  these  ever  failed  of  a 
success — were  it  not  that  all  of  them  are  mis¬ 
taken,  and  neither  has  either  sound  argument  or 
authentic  information  to  support  his  position. 

That  cannot  be  a  “monopoly”  which  is 
open  to  every  man,  woman,  and  child  in  the 
land  to  participate  in  all  its  privileges  and 
profits.  There  is  no  production  except  such 
as  patent  laws  make  a  monopoly  because  the 
property  of  the  man  who  invented  it,  to  which 
anybody  is  not  perfectly  free  to  apply  his  cap¬ 
ital  or  his  labor,  and  from  which  nothing  but 
considerations  of  personal  advantage  will  ever 
deter  him. 

Why,  sir,  look  at  the  growth  within  the  last 
ten  years  of  that  very  manufacture  toward 
which  the  intensity  of  the  language  and  hos¬ 
tile  action  of  the  gentleman  from  Indiana  [Mr. 
Kerr]  seems  especially  directed,  the  woolen 
manufacture.  I  have  a  table  here  from  that 
great  confessional  of  the  nation,  the  census, 
which  shows  for  1860  and  1870,  arranged  by 
States,  all  the  woolen  mills  in  the  country  and 
their  power  by  sets  of  cards,  the  unit  of  power 
in  that  production  : 


States. 

1870. 

1860. 

No.  of  estab¬ 
lishments. 

No.  of  sets  of 
cards. 

No.  of  estab¬ 
lishments 
producing 
woolen  fab¬ 
rics. 

No.  of  sets  of 
cards. 

No.  of  estab¬ 
lishments 
carding  wool 
and  dressing 
cloth  only. 

Eastern  States: 

Maine . 

107 

331 

26 

80 

37 

New  Hampshire . 

77 

505 

51 

146 

17 

Vermont . 

65 

175 

46 

99 

5 

Massachusetts . 

183 

1,367 

134 

821 

5 

Rhode  Island . 

64 

469 

57 

253 

0 

Connecticut . 

109 

660 

84 

265 

0 

Total . 

605 

3,507 

398 

1,664 

64 

Middle  States : 

New  York . 

248 

834 

140 

324 

55 

New  Jersey . i . 

29 

81 

35 

61 

0 

Pennsylvania . 

471 

1,360 

270 

483 

39 

Delaware . . . 

11 

30 

4 

8 

2 

Maryland. . . . 

30 

59 

27 

44 

3 

.  Total . 

789 

2,364 

476 

920 

99 

11 


TABLE — Continued. 


1870. 

0 

1860. 

States. 

No.  of  estab¬ 

lishments. 

No.  of  sets  of 

cards. 

f 

No.  of  estab¬ 

lishments 

producing 

woolen  fab¬ 

rics. 

No.  of  sets  of 

cards. 

No.  of  estab¬ 

lishments 
carding  wool 

and  dressing 

cloth  only. 

Western  States : 

Ohio . . . 

216 

357 

115 

173 

48 

Indiana . 

175 

346 

79 

112 

41 

Illinois . 

109 

254 

21 

37 

29 

Michigan . 

54 

116 

16 

14 

15 

Wisconsin . 

64 

131 

15 

19 

11 

Iowa . 

85 

196 

12 

13 

16 

Missouri . 

156 

258 

11 

15 

86 

Minnesota . 

10 

19 

1 

0 

0 

Kentucky . 

32 

51 

37 

83 

81 

Kansas . . . 

9 

24 

0 

0 

0 

Total . 

910 

1,752 

307- 

466 

327 

Southern  States : 

Virginia . 

67 

109 

45 

50 

63 

West  Virginia . 

72 

113 

0 

0 

0 

North  Carolina . 

48 

70 

7 

23 

21 

South  Carolina . 

15 

25 

1. 

10 

9 

Georgia . 

44 

68 

11 

30 

19 

Florida . 

1 

1 

0 

0 

0 

Alabama . 

14 

24 

6 

14 

10 

Arkansas . . 

13 

17 

0 

0 

11 

Mississippi . 

8 

13 

4 

13 

6 

Louisiana . 

2 

12 

1 

4 

1 

Texas . 

20 

29 

2 

4 

8 

Tennessee . 

148 

176 

1 

1 

69 

Total . 

452 

657 

78 

149 

217 

Pacific  States : 

California . 

6 

52 

1 

6 

0 

Oregon . 

5 

16 

1 

4 

1 

Total . 

11 

68 

2 

10 

1 

Territories : 

New  Mexico . 

* 

1 

1 

0 

0 

0 

Utah . 

15 

19 

0 

0 

3 

Total . 

16 

20 

0 

0 

3 

Total  United  States . 

2,783 

8,368 

1,261 

3,209 

711 

From  this  it  appears  that  this  “  hateful 
monopoly”  had  in  this  country,  in  1860,  1,261 
mills  with  8,209  sets  of  cards;  and  in  1870, 
2,783  mills,  with  8,368  cards,  and  that  while 
in  1860  his  own  rich  and  powerful  Northwest 
had  only  307  of  these  establishments,  with  a 
power  of  only  466  cards,  there  are  now  there 
910  mills  with  a  power  of  production  meas¬ 
ured  by  1,752  sets  of  cards.  Thus  vanish  be¬ 
fore  the  test  of  facts  all  his  charges  that  in  this 
free  land  anybody  can  secure  a  “monopoly” 
of  any  kind  of  productive  industry. 

The  gentleman  from  Illinois  [Mr.  Burch- 
aud]  is  equally  mistaken  in  his  bounty  theory, 
whether  he  applies  it  to  the  producer  or  the 
operative.  In  the  first  place,  if  it  were  true, 
does  he  suppose  that  there  is  police  force 


enough  in  the  country  to  hold  back  the  rush 
of  capitalists  and  workmen  who  would  be 
crowding  in  to  share  these  bounties?  You 
cannot  strew  gold  along  any  pathway  without 
finding  the  whole  human  race  turning  its  foot¬ 
steps  thitherward.  Nor  do  facts,  more  than 
the  laAvs  of  human  action,  bear  out  any  state¬ 
ment  of  extraordinary  profits,  either  to  the 
producer  or  the  operative.  There  may  be 
instances,  as  there  are  in  every  calling  in  life, 
where  instinct  and  energy  and  frugality,  and 
it  may  be  chance,  have  been  rewarded  with 
fortune.  But  the  rule  covering  men  by  classes 
and  reaching  over  long  years  is,  in  these  pur¬ 
suits  as  in  all  others,  that  the  failures  far 
exceed  the  successes.  And  nothing  can  be 
established  more  clearly  from  returns  and 


12 


official  data  than  the  fact  that  for  the  last 
thirty  years,  including  all  the  inflations  and 
chance  opportunities  of  the  war,  capital  in 
this  field  has  not  made  six  per  cent. 

I  now  turn  briefly  to  the  charge  of  the  gen¬ 
tleman  from  Missouri,  [Mr.  Finkelnburg,] 
that  tariffs  grind  down  the  wage  laborer  in  pov¬ 
erty  and  misery,  while  the  producer  bloats  in 
his  gains.  I  do  not  complain  of  the  temper 
of  the  gentleman  in  his  treatment  of  this  sub¬ 
ject.  I  only  regret  that  he  did  not  get  his  in¬ 
formation  through  his  eyes  instead  of  his  ears. 
Nor  will  I  raise  an  issue  at  this  time  with  the 
labor  commission  of  Massachusetts,  which 
has  furnished  him  his  data.  I  hail  every  effort 
of  that  commission  to  elevate  the  condition 
of  labor  in  Massachusetts  ;  but  the  instances 
they  have  dragged  to  light  no  more  prove  the 
general  condition  of  the  operative  than  the 
marching  into  open  court  of  a  criminal  for 
trial  proves  the  general  prevalence  of  crime 
in  any  community.  They  prove  the  contrary, 
that  society  will  not  tolerate  their  longer  con¬ 
tinuance. 

But,  sir,  whoever  at  home  or  here  represents 
the  operative  as  ground  down  in  poverty  and 
want  by  his  bloated  employer  is  mistaken,  and 
he  has  but  to  open  his  eyes  and  he  will  see. 
I  have  lived  all  my  days  among  these  opera¬ 
tives.  Some  of  my  colleagues  and  others  upon 
this  floor  have  been  of  them,  and  have  more 
right  than  I  have  to  speak  for  them.  The 
honorable  distinction  to  which  these  men 
have  risen  from  their  ranks  is  the  pride  and 
boast  of  the  operative  as  he  points  to  his 
opportunities  and  his  ambition  in  the  battle 
of  life.  I  would  not  like  to  go  home  among 
these  men  if  I  failed  to  vindicate  them  from 
the  foul  aspersions  which  misinformation  casts 
upon  them.  There  is  no  class  of  men  on  the 
face  of  the  globe,  who,  as  a  class,  are  more 
frugal,  mote  moral,  more  intelligent,  or  make 
better  citizens.  As  a  class  they  take  care  of 
their  earnings,  secure  homes  of  their  own,  make 
monthly  deposits  in  the  savings  banks,  build 
school-houses  and  churches,  and,  better  than 
all,  build  character  and  influence  for  them¬ 
selves,  to  which  the  common  judgment  of  the 
community  accords  respect  and  points  with 
pride.  YVe  have  in  Massachusetts  savings  banks 
established  to  gather  in  and  invest  their  earn¬ 
ings  for  them.  No  one  person  can  deposit 
more  than  $1,000  in  any  one  of  them.  There 
are  one  hundred  and  sixty  of  them  in  the 
Commonwealth,  and  there  are  deposited  in 
them  to-day  $163,535,943  by  560,890  different 
depositors  out  of  1,443,156  inhabitants  in  the 
whole  State,  one  in  every  three.  Recent  in¬ 
vestigations  demonstrate  that  more  than  sev¬ 
enty-five  per  cent,  of  all  this  sum  is  the  savings 
of  wage  labor.  I  need  say  no  more  in  vindi¬ 
cation  of  the  Massachusetts  operative. 

Equally  erroneous  was  the  inference  of  the 
gentleman  from  the  table  of  dividends  of 


certain  selected  corporations  furnished  him 
from  the  same  source.  I  have  a  copy  of  a 
letter  addressed  to  the  gentleman  from  Mis¬ 
souri  by  one  of  the  most  reliable  men  in  my 
State,  Mr.  R.  S.  Fay,  himself  an  officer  in 
many  of  these  very  corporations,  which  wholly 
dissipates  all  his  conclusions.  I  have  his  per¬ 
mission  to  annex  his  letter  to  my  remarks.* 


*  Washington,  March  28,1872. 

Sir:  In  a  speech  in  the  House  on  the  23d,  you 
quoted  the  profits  of  certain  woolen  and  cotton-mills 
in  Massachusetts  as  arguments  in  favor  of  a  reduc¬ 
tion  of  tariff.  Feeling  sure  that  you  desire  to  make 
up  your  mind  upon  a  correct  understanding  of  facts, 
I  venture  to  address  you  in  explanation  of  some  of 
the  figures  you  quote.  I  will  confine  myself  to  two 
or  three  instances  where  I  am  in  a  position  to  speak 
from  authority.  The  Middlesex  mills,  of  which  I  am 
treasurer,  were  started  in  1815  by  Mr.  Goulding, 
who  lost  his  entire  investment  in  about  five  years. 
The  property  was  then  bought  by  Mr.  Hard,  who 
became  bankrupt  in  1828.  Mr.  Hard’s  assignees,  by 
way  of  disposing  of  their  property,  made  up  a  corpor¬ 
ation  called  the  Middlesex  Company,  with  a  capital 
of  half  a  million,  which  was  afterward  increased 
to  a  million.  The  business  was  fairly  remunerative 
until  the  tariff  of  1846  came  into  operation,  but 
after  that  the  profits  were  small  and  uncertain, 
until  in  1857  the  company  failed.  In  1858  the  cor¬ 
poration  was  reorganized,  and  $300,000  of  new 
capital  was  paid  in,  but  the  value  of  the  property 
had  so  diminished  that  even  with  this  increase  of 
capital  the  stock  was  considered  worth  only  $750,000, 
and  was  so  established.  You  will  see,  therefore, 
that  the  average  dividends  of  twenty-two  and 
a  half  per  cejit..  cited  by  you  as  earned  upon 
a  capital  of  $750,000,  gave  but  half  that  return 
upon  the  amount  invested  since  the  beginning, 
and  that  in  a  decade  in  which  were  included 
the  extraordinary  profits  of  the  war  with  its 
great  rise  in  prices  and  inflation.  The  profits  of  the 
last  four  years  have  been  thirteen  per  cent,  per 
annum  on  the  capital  of  $750,000,  or  only  about 
eight  per  cent,  to  an  original  holder  of  the  stock. 

On  the  other  hand,  our  pay-roll  in  1858-59,  1860-61, 
was  about  eighteen^  thousand  dollars  per  month. 
At  present  it  is  $26,000  for  the  same  number  of 
hands.  The  average  wages  of  able-bodied  men 
were  then  ninety-five  cents  a  day;  they  are  now 
$1  37.  Are  we  getting  all  the  profit  ?  Is  not  the  inter¬ 
est  of  the  laborer  identical  with  that  of  the  manu¬ 
facturer;  and  is  it  true  kindness  to  the  former  to 
excite  a  feeling  of  antagonism?  Owing  chiefly  to 
the  enormous  advance  in  the  price  of  wool  we  are 
this  season  running  at  a  loss,  and  would  gladly  close 
our  mills  were  it  not  for  our  unwillingness  to  throw 
a  thousand  hands  out  of  employment. 

Another  of  the  mills  cited  by  you  is  the  Chicopee 
Company,  of  which  I  am  a  director.  The  Chicopee 
Company  was  chartered  with  a  capital  of  $700,000. 
Under  the  tariff  of  1846  its  profits  dwindled  to  noth¬ 
ing;  in  1857  it  failed,  and  was  sold  to  a  new  set  of 
stockholders  for  $220,000.  Two  hundred  thousand 
dollars  new  money  was  put  in,  and  during  the  war 
they  made  a  great  deal  of  money  on  heavy  shirtings 
and  cotton  flannels  used  for  Army  clothing.  With 
these  profits  they  increased  their  machinery,  and 
are  now  prosperous  and  in  good  order.  But  their 
average  dividends,  quoted  by  you  as  twenty-six  per 
cent,  on  $420,000,  should  be  stated  as  twelve  per 
cent,  on  $900,000  to  give  a  correct  idea  of  their  busi¬ 
ness. 

The  Salisbury  mills  failed  in  1856,  (before  the  cri¬ 
sis,)  sinking  their  whole  capital  of  $1,000,000,  and 
$1,000,000  of  new  money  was  putin  to  set  them  going 
again.  So  their  average  dividend  for  the  last  ten 
years  must  be  divided  by  two  and  reduced  from 
twenty-two  per  cent,  to  eleven  per  cent,  to  represent 
their  business.  For  three  years  past  they  have  not 
divided  quite  eight  per  cent,  on  their  investment. 

I  am  not  a  believer  in  high  protective  duties,  but 


13 


But  I  have  said  all  that  space  will  justify  upon 
the  inordinate  gains  of  the  producer. 

I  ask  a  moment’s  further  indulgence  while  I 
state  my  objections  to  particular  features  of 
this  bill,  and  the  amendments  I  hope  the  House 
will  adopt  and  make  it  what  the  country  de¬ 
mands,  a  safe  repeal  of  duties  and  taxes.  It 
is  not  to  the  amount  of  reduction  that  I  object, 
for  I  would  make  it  more  by  $15,000,000,  but 
it  is  to  the  special  and  unwise  discriminating 
application  of  that  reduction.  Out  of  the 
$18,000,000  of  reduction  in  duties  recom¬ 
mended,  nearly  one  third  of  them  all  is  taken 
off  from  wools  and  woolens  alone,  while  of  all 
cotton  fabrics  the  duties  on  brown  printing 
cloths  and  their  prints  alone  are  reduced 
twenty  per  cent.  I  have  already  alluded  to  a 
like  reduction  on  spool-thread.  The  conse¬ 
quence  of  such  partial  and  selected  reductions, 
if  they  could  be  borne  under  any  circumstances 
when  all  other  productions  were  suffering  like 
reduction,  is  to  turn  the  whole  burden  of  in¬ 
creased  importation,  sure  to  follow  this  legis¬ 
lation,  upon  these  particular  industries.  This 
is  to  happen,  too,  when,  as  never  before,  the 
telegraph  makes  galvanic  connections  of  the 
nerves  of  trade  all  over  the  world,  &nd  by 
means  of  steamships,  the  Suez  canal,  Pacific 
commerce,  and  transcontinental  railroads,  im¬ 
portations  can  be  multiplied  fourfold  in  the 
same  time  required  in  the  last  generation.  To 
thus  disturb  the  relations  of  one  industry  to  all 
others  is  to  fill  capital  invested  in  it  with  dis¬ 
trust,  and  it  seeks  investment  elsewhere ;  is  to 
fill  labor  engaged  in  it  with  alarm,  and  it  seeks 
employment  elsewhere  :  and,  finally,  compels 
the  industry  itself  to  encounter  new  difficul¬ 
ties  when  the  scale  of  all  expenditure  is  grad¬ 
uated  by  general  rates  of  duties  it  does  not 
itself  enjoy. 


while  our  raw  material,  wool,  the  iron  and  steel  that 
make  our  machinery,  the  coal  we  burn  for  heat  and 
power,  our  dyes  and  drugs,  and  every  material  and 
element  that  enter  into  the  expense  of  manufac¬ 
ture,  are  charged  with  duties,  it  is  surely  but  fair  that 
wojolen  goods  should  be  equally  protected.  More¬ 
over,  were  I  a.  free-trader  I  should  be  sorry  to  carry 
my  point  by  arguments  drawn  from  fallacious  data, 
and  so  I  am  sure  would  you. 

I  am,  respectfully,  yours,  It.  S.  FAY. 

I  reopen  my  letter  to  add  a  word  upon  the  price 
at  which  some  of  the  stocks  referred  to  have  sold. 
Itis  true  the  Middlesex  company’s  shares,  represent¬ 
ing  $175  paid  in,  sold  at  one  time  for  nearly  four  hun¬ 
dred  dollars,  and  the  Salisbury  shares,  on  which  $200 
had  been  paid  in  sold  for$360;  but  this  was  atatime 
when  gold  was  at  200  and  upward,  so  that  the  pre¬ 
mium  was  not  excessive  in  one  case,  and  the  Salis¬ 
bury  stock  was  at  a  discount.  At  present  these  stocks 
are  worth  :  Middlesex  company,  $175  per  share  paid 
in;  market  value,  $160;  Salisbury  mills,  $200  paid  in; 
market  value,  $155. 

I  believe  I  know  of  but  one  woolen  mill  in  New 
England  whose  stock  stands  at  a  premium  on  the 
amount  paid  in  upon  it.  That  mill  was  built  in  1861, 
and  reserved  its  war  profits  to  double  its  machinery, 
making  only  very  moderate  dividends. 

Hon.  G.  A.  Finkiilndurg,  M.  G. 


Now,  sir,  since  the  repeal  of  the  duty  on  tea 
and  coffee  has  reduced  already  $15,893,846,  it 
becomes  all  the  more  necessary  to  cast  about 
and  redistribute  the  remaining  reduction. 
There  can  hardly  be  less  than  $20,000,000 
taken  from  internal  revenue.  I  would  take 
more,  but  that  sum,  or  nearly  that  sum,  with 
a  free  list  of  not  less  than  $3,500,000,  all  agree 
must  be  adopted.  These,  with  the  duty  on  tea 
and  coffee,  make  $39,393,846,  and  leave  less 
than  $11,000,000  of  $50,000,000 — the  utmost 
limit  of  reduction  admitted  possible  by  any 
one  Avho  has  the  slightest  responsibility  in  the 
administration  of  affairs  for  the  financial  credit 
of  the  nation.  Instead  of  fastening  two  thirds 
of  all  this  reduction  upon  two  industries,  as 
this  bill  proposes,  I  intend  to  move  its  distribu¬ 
tion  over  all  manufactures  by  a  general  ten 
per  cent,  reduction,  substantially  as  provided 
in  the  Senate  bill.  For  this  amendment  I  hope 
to  have  the  support  of  the  House.  With  its 
adoption  and  such  other  amendments  as  will 
suggest  themselves  in  the  progress  of  the  bill, 
I  shall  support  and  vote  for  it. 

The  gentleman  from  Pennsylvania  [Mr. 
Kelley]  has  indicated  his  purpose  in  the  outset, 
before  the  bill  is  considered,  to  move  to  strike 
out  its  enacting  clause,  that  he  may  thereby 
reach  his  own  substitute.  But  there  is  nothing 
in  his  substitute  which  cannot  be  grafted  upon 
this  bill  by  amendment  if  the  majority  desire 
it.  I  shall  ask  the  House,  therefore,  to  stand 
by  the  form  of  this  bill  and  apply  to  it  by 
amendment  every  correction  that  can  possibly 
be  desired  by  that  majority  in  any  way.  Any 
other  course  will  involve  all  in  confusion 
through  which  no  just  legislation  can  be  at¬ 
tained. 

In  conclusion,  Mr.  Chairman,  let  me  say  that 
the  field  of  study  upon  which  one  enters  as  he 
takes  his  seat  in  the  room  of  the  Committee 
of  Ways  and  Means  is  the  broadest  and  grand¬ 
est  that  opens  to  the  statesman.  It  compre¬ 
hends  the  entire  material  prosperity  of  the 
greatest  and  most  wonderful  of  the  nationsxof 
the  earth.  It  touches  the  forces  which  move 
the  growth,  which  push  the  development,  and 
which  influence  the  direction  of  all  material 
progress  and  strength  among  such  a  people. 
Although  my  service  there  has  been  much 
briefer  than  that  of  the  gentleman  from  New 
York,  [Mr.  Brooks,]  yet,  unlike  him,  I  have 
grown  more  and  more  to  admire  and  cling  to 
that  system  of  Americanizing  all  growth  and 
all  development  and  all  attainment  in  this 
land,  which  began  in  the  First  Congress, 
under  Washington,  and  which  finds  its  great¬ 
est  achievement  in  the  courage  and  ability 
with  which  it  has  enabled  this  Administration 
to  bear  the  greatest  financial  burdens  and 
solve  the  most  difficult  financial  problems 
ever  visited  by  political  trouble  and  organic 
commotion  upon  a  great  people.  * 


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